A Medical Device Daily

Boston Scientific (Natick, Massachusetts) reported a series of management changes and restructuring initiatives designed to strengthen the company and position it for long-term success. The company reported a 4Q09 loss of $1.1 billion, and said it would lay off as many as 1,300 employees, roughly 10% of its total staff.

The company says gross expenses are expected to be reduced by a range of $200 million to $250 million from the 2009 base during the next two years, representing a reduction of 5.5% to 7%. These initiatives will also result in a gross head count reduction of 1,000 to 1,300, or 8% to 10% of the direct labor base. The action plans related to these reductions are expected to result in pre-tax charges of approximately $180 million to $200 million. The vast majority of the restructuring costs will be cash charges.

Key components of the management changes and restructuring initiatives include:

• The Cardiovascular Group and Cardiac Rhythm Management Group (formerly Guidant) will be combined into one organization. The new group will be led by Hank Kucheman, who has been promoted to executive VP and president of the new Cardiology, Rhythm and Vascular Group. Kucheman most recently served as president of the Cardiovascular Group.

• Fred Colen has been promoted to the new role of executive VP and chief technology officer. The company says that under Colen's leadership, it will change its allocation of R&D resources to incorporate its newly established growth priorities, create technology Centers of Excellence, drive improved product development timing and efficiency, and expand the spectrum of new product opportunities. Colen most recently was president of the Cardiac Rhythm Management Group.

• The company's international headquarters will be eliminated. The presidents of Japan, Europe (including a consolidated Shared Services team) and the newly formed Emerging Markets Group will report directly to the CEO. Leadership for the Emerging Markets Group will be announced at a later date.

• The Endoscopy division and new Urology and Women's Health division will each report directly to the CEO, and the Endosurgery Group structure, which currently oversees the Endoscopy and Urology/Gynecology divisions, will no longer exist.

• Steve Moreci, currently the Endosurgery Group President, will lead a newly created team devoted to Global Sales Focus. The team will focus on reaching the economic customer on a global basis and as a result the company's Corporate Sales group will become part of this team.

"The actions we are announcing will provide the organizational structure and leadership needed to execute our strategic plan and fulfill the enormous promise of this company," said Ray Elliott, president/CEO of Boston Scientific. "They are aimed at driving innovation, accelerating profitable growth and increasing both accountability and shareholder value. Above all else, they will help us better serve our customers and their patients."